Iraq’s foreign currency reserves fell by $7.4 billion during the first five months of 2026, according to data reported by Shafaq News.
The decline marks a significant contraction in the Central Bank of Iraq’s (CBI) liquidity buffer, underscoring the vulnerability of the country’s balance sheet to fluctuations in global energy markets.
The reserve erosion coincides with a slowdown in crude oil export revenues, which totaled $18.
Despite the drawdown in foreign exchange holdings, Iraq’s gold reserves increased by 5.7% over the same period.
This shift suggests a strategic diversification effort by the CBI, though the modest gain in precious metals does not offset the substantial loss in liquid foreign assets.
The move aligns with broader trends among emerging-market central banks seeking to hedge against currency volatility and geopolitical sanctions risk.
The reserve erosion coincides with a slowdown in crude oil export revenues, which totaled $18.679 billion in the first half of 2026 as Iraq sold 268.1 million barrels.